The Sensitivity of Optimal Policies to Parametric and Stochastic Changes

A. Hughes-Hallett
Authors registered in the RePEc Author Service: Andrew Hughes Hallett

Chapter 7 in Optimal Control for Econometric Models, 1979, pp 134-164 from Palgrave Macmillan

Abstract: Abstract Traditionally econometric models are used to find acceptable policy strategies by extensive simulation exercises. To resolve conflicts between rival target variables or between rival values of a target over time, or to place costs on large variations in instrument variables, some index of overall performance must be employed —but there is no guarantee we approach the best policies. The success of optimal control methods in other contexts therefore makes it very tempting to apply them for policies to optimise that index. Since recent results indicate that, computing constraints apart, the mathematical and dimension difficulties of the general problem are now largely solved, it is now important to gain experience of the specification of the economic aspects of the problem. Virtually no experimentation of this kind has been undertaken.

Keywords: Period Solution; Equation Error; Econometric Model; Welfare Index; Welfare Change (search for similar items in EconPapers)
Date: 1979
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-16092-1_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349160921

DOI: 10.1007/978-1-349-16092-1_7

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().